In the case of Harkrader v. Wadley in 1898, the U.S. Supreme Court ruled on a dispute involving railroad bonds issued by the town of Bristol, Virginia. The plaintiff, Harkrader, was a taxpayer who sued to prevent his property from being taxed to pay interest on these bonds which were held by Wadley and others. He argued that they were invalid because they had been issued without proper legal authority and against state law at the time which prohibited municipalities from becoming stockholders in any company or corporation unless authorized by special act of assembly. The court found that although there may have been irregularities with how these bonds were initially approved and issued, it did not make them void as long as they ended up in hands of bona fide holders for value before maturity - those who bought them without knowledge of any potential defects or issues affecting their validity. Therefore, even though some aspects related to issuing these municipal securities might have violated state law originally (which could potentially lead to criminal charges against responsible officials), this would not affect rights acquired under such securities by innocent third parties like bondholders represented here by defendant Wadley.

In the dissenting opinion for Harkrader v. Wadley, it was argued that the majority's decision to uphold a state law allowing creditors to seize and sell debtor's property without notice or hearing violated due process rights under the Fourteenth Amendment. The dissent emphasized that such laws were fundamentally unfair as they allowed creditors to unilaterally decide on debtors' liability and arbitrarily deprive them of their property without any judicial oversight or opportunity for defense. It further contended that these laws essentially gave private individuals governmental powers, which is contrary to constitutional principles separating public power from private interests. Therefore, in this view, such laws should be struck down as unconstitutional infringements on individual liberty and property rights protected by the Fourteenth Amendment.